UpdateMexico chem traffic may resume as rail lines set to re-open

09 July 2010 21:47  [Source: ICIS news]

Rail traffic resumes(adds updates throughout)

HOUSTON (ICIS news)--Two major rail carriers in the US-Mexico border region expect to open rail lines over the weekend following the major flooding that disrupted chemical traffic, the companies said on Friday.

Kansas City Southern de Mexico (KCSM) said its main line would begin restoring service to northern Mexico over the weekend, noting that continued rain and high water levels could remain obstacles.

KCSM said the main lines had been cleared of all derailments, but that it would take about two weeks to clear all the trains that had been parked due to the service disruption.

The force majeure and embargo issuances at Laredo, Monterrey and Matamoros would remain in effect for the time being, KCSM said.

Likewise, Union Pacific said it planned to have its four railroad crossings at the US-Mexico border at least partly open over the weekend.

The company had said that rail operations at its interchanges in Laredo, Eagle Pass and Brownsville, Texas, were shut down as a result of flooding.

But on Friday, limited crossing had begun at the Brownsville and Eagle Pass interchanges, with an embargo on new shipments lifted at Eagle Pass, said Union Pacific spokeswoman Raquel Espinoza.

Union Pacific said it was expecting a gradual start-up of its Laredo operations on Saturday if weather permits.

Traffic had been slowed or completely stalled due to flooding from last week’s Hurricane Alex and the tropical depression that made landfall on Thursday, dumping as much as 10 inches (25 cm) of additional rain in the border region.

“We had a car loading on Monday, but Union Pacific is telling us they can’t move it,” a chemical distributor said. “We expect delays, but hope it is all back to normal by next week.”

Union Pacific’s rail operations in El Paso, Texas, were not affected by the storms, which were far to the city's southeast. As such, that location was taking some shipments that would typically go through the other interchanges.

The rail company said it was helping emergency responders, including material and equipment for repairs.

Union Pacific noted that it was working with the KCSM and Ferrocarriles de Mexico (FerroMex) railroads to streamline rail shipments headed to Mexico, where major flooding had interrupted service between Nuevo Laredo and Monterrey.

Monterrey is Mexico’s third-largest city and a northern hub of industrial activity.

The closures were causing an estimated 30% hike in regional train shipment costs, a source said, noting that companies had to invoke contingency plans for diverting containers from trains to trucks to circumvent blockages.

The timetable for chemical shipment delays varied widely by source. A plastics trader had said the closures could last until the weekend or middle of next week, while an ethanol supplier on Thursday said the hold-up could last at least 30 days.

US soda ash market sources were uncertain on the length of delays, but said the rain had also disrupted shipments to Mexico, its largest foreign customer.

“I know in my discussions with customers from Mexico, they are even in shock over the impact of all of this rain,” a US chemical exporter said. “Sometimes they think not being on the coastline will protect them from hurricanes – not this time.”

The ethanol supplier said it was considering the option of sending material into Mexico by trucks.

Both of Laredo's commercial bridges to Mexico that accommodate tractor trailers were open, said Xochitl Mora Garcia, city spokeswoman.

The Colombia-Solidarity International Bridge had no wait times, she said on Friday. However, she did not know if there were any wait times for the World Trade International Bridge, as was earlier reported.

Laredo is the largest inland port in the US, which sees 60% of the nation's trade with Mexico, she said. Each day, 12,000 trucks pass through the city before crossing into Mexico.

Additional reporting by Ben Lefebvre, James Young, Heather McGuire Doyle, Lane Kelley and Al Greenwood

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